[File Photo: Congress President Sonia Gandhi talking to party Vice President Rahul Gandhi on stage during the farmers rally at Ramlila Maidan in New Delhi . PTI Photo by Shahbaz Khan(PTI4_19_2015_000094B)]

Yesterday’s revelation of alleged involvement of Uttarakhand Chief Minister Harish Rawat and his Secretary in a liquor scam in the State has brought to the fore an old question – To what extent does the Liquor economy fund the Congress’s politics ?

It is no secret that across States where the Congress is or has been in power it has allowed strongmen from the liquor industry to occupy prominent party positions.

Perhaps the most illustrious of Congressmen with links to the Liquor Economy is the former Andhra Pradesh Congress Committee president Botcha Satyanarayana (since left Congress joined YSRCP) who’s family runs 31 liquor outlets, said a report. To further understand how the Liquor Economy funds Politicians, one needs to examine the report submitted by the anti-Corruption Bureau to a Special Court:

According to the ACB’s report, which has been submitted to the Special Court for ACB cases, the mafia pays protection money to Ministers, MLAs and journalists. Evidently, the report could upset the political applecart and hence the government’s reluctance to reveal its contents.

The Congress in neighboring Maharashtra is no exception to having close links with the Liquor Economy. The Vikhe Patils of Maharashtra have been deeply rooted in Congress. Their Co-operative Sugar Factory in Maharashtra’s Ahmednagar district produces liquor. 94 per cent of the country liquor produced by the factory is sold in Chandrapur – a district with industrial and mining pockets where mainly economically lower sections got addicted to cheap liquor ruining their families, said a report, detailing factory’s connection with the Congress:

Congress leader and leader of the Opposition in the Maharashtra Assembly Radhakrishna Vikhe Patil was for long chairman of this cooperative. Now the post is held by his son Dr Sujay. The then Prime Minister Jawaharlal Nehru had inaugurated the factory.

Last year in Kerala, a well-known liquor baron Biju Ramesh had labeled bribery charges against the State Finance Minister KM Mani of Kerala Congress, who has been an MLA for almost 50 years and holds the record of presenting 12 Budgets (the maximum) in the Assembly. Biju alleged that the liquor lobby had paid Rs 1 crore as bribe to Mani. He said Mani had demanded Rs 5 crore to reverse the controversial decision to close down more than 300 three star bars and also some four star bars.

In the context of Liquor Barons in Andhra and Maharashtra being deeply associated with the Congress it must be pointed out that the Congress has never been in power at the Center without ruling both of these states for most of the six decades since Independence. This underscores the centrality of the Liquor Economy to the Congress’s political funding.

State governments are becoming more and more dependent on alcohol revenue to pay their bills.

the Tamil Nadu State Marketing Corporation (Tasmac), the government-owned IMFL monopoly, alone paid a whopping Rs. 21,800 crore into the government kitty.

In Kerala, where 22 per cent of the total government revenue came from the bottle, the total excise and commercial tax revenue from alcohol (IMFL and toddy) was close to Rs. 8,000 crore.

Governments often project excise revenue alone, but sales tax is much more than Excise. In States such as Tamil Nadu, Kerala and Delhi, where the wholesale and retail liquor business is under government control, alcohol revenue is relatively easy to reckon.

“Liquor provides 20 per cent of the share of the government’s own revenue in most States,” says Jose Sebastian, associate professor at Gulati Institute of Finance and Taxation, Thiruvananthapuram.

Uttarakhand Excise Scam – Congress in the dock

A sting video has been released by the BJP which allegedly shows Uttarakhand Chief Minister Harish Rawat’s PS Mohammad Shahid negotiating with middlemen from private liquor industry.

BJP has asked for instant resignation of Harish Rawat over alleged involvement of his PS in liquor scam and has held Rawat responsible for dereliction of duty as Rawat was transferred to the State for speeding relief work in the aftermath of Uttarakhand floods. However, Rawat prioritized money-making over helping the flood victims, alleged the BJP.

The video allegedly shows Rawat’s PS Mohammad Shahid brokering a deal with the Liqour industry middlemen, wherein the PS asks for payment. Harish Rawat’s name is also mentioned in the video.

Harish Rawat, as the Union Minister, had handpicked Mohammad Shahid from Gujarat cadre as his PS. Shahid continued as the PS to Rawat even when Rawat was made the Chief Minister of Uttarakhand replacing Vijay Bahuguna over disastrous management of Uttarakhand floods relief work.

When Rawat took over as the Chief Minister, he overhauled the liquor distribution policy in the State. The job of distribution of liquor in the State was taken over from the government agency Garhwal Mandal Vikas Nigam and given to the private liquor agencies.

Liquor was to be distributed – from wholesale to retail – by private agencies brought on board handpicked and chosen by Chief Minister and his PS, alleged BJP. The BJP also alleged that Rupees hundreds of crores of understanding was made between the PS Mohammad Shahid and private liquor agencies.